European Competition Law provides a wide-ranging review of the European rules relating to competition: restrictive agreements, abuse of a dominant position, impact of intellectual property rights, procedure, merger control, State aid.

European Competition Law

Standardization agreements have as their objective the definition of technical requirements, or the current or future quality of products, production processes or methods . Standards can be either defined by private undertakings, or under the aegis of public authorities or bodies entrusted with the operation of services of general economic interest. According to the Commission, standardization agr …

Technical standards agreements/Certification

Standardization agreements have as their objective the definition of technical requirements, or the current or future quality of products, production processes or methods . Standards can be either defined by private undertakings, or under the aegis of public authorities or bodies entrusted with the operation of services of general economic interest. According to the Commission, standardization agreements produce their effects on four possible markets, i) relevant products or services, ii) relevant technologies iii), the service market for standard setting and iv) the distinct market for testing and certification .

Conditions for obtaining the necessary standard or certification can constitute a barrier to entry. Standardization agreements which are part of a broader restrictive agreement aimed at excluding actual or potential competitors restrict competition by object . Such agreements are not contrary to Article 101 of the Treaty if the selection criteria used are likely to ensure the compliance of candidate undertakings without going beyond what is strictly necessary to do so. Therefore, an agreement on standards or certification must, in order to be lawful, be open and transparent and must not exclude, without objective justification, non-certified undertakings offering equivalent guarantees , nor limit technical development, production and sale through licensing agreements . The Commission considers that participation in standard-setting must not be restricted and the procedure for adopting the standard in question must be transparent. Furthermore standardization agreements should contain no obligation to comply with the standard and provide access to the standard on fair, reasonable and non-discriminatory terms . In effect, in order to prevent IPR holders from making the implementation of a standard difficult by refusing to license, or by requesting unfair or unreasonable fees, the Commission now requires participants wishing to have their IPR included in the standard to provide an irrevocable commitment in writing to offer to license their essential IPR to all third parties on fair, reasonable and non-discriminatory terms. The “FRAND” (fair, reasonable and non-discriminatory) commitment must be given prior to the adoption of the standard and undertakings assess for themselves whether their terms fulfill the FRAND commitment . In order to assist undertakings, the Commission published a communication on 29 November 2017 setting out its approach to standard essential patents (SEP) and the remuneration of those patent licenses . The document, which is not binding, pursues two objectives: incentivizing the development and inclusion of top technologies in standards, by preserving fair and adequate return for these contributions, and ensuring smooth and wide dissemination of standardized technologies based on fair access conditions. In order to achieve those objectives the Commission considers it necessary to first of all increase transparency on the existence, scope and relevance of SEPs, which is vital for fair licensing negotiations and for allowing potential users of a standard to identify the scale of their exposure to SEPs and necessary licensing partners. To foster accessibility of information, the Commission advocates improving the quality of information recorded in databases maintained by standard developing organizations (SDOs). In particular, the databases must be able to ensure that the access to more updated and precise information on the SEP and scrutiny of the essentiality of declared SEPS for a standard. With regard to the evaluation of the FRAND licensing terms, the Commission prefers not to adopt a position and considers that “the parties are best placed to arrive at a common understanding of what are fair licensing conditions and fair rates, through good faith negotiations”. Further, it stresses that “there is no one-size-fit-all solution to what FRAND is: what can be considered fair and reasonable differs from sector to sector and over time”. Nevertheless, the Commission finds that licensing terms must have a relationship to the economic value of the patented technology. That value primarily needs to focus on the technology itself and in principle should not include any element resulting from the decision to include the technology in the standard. In cases where the technology is developed mainly for the standard and has little market value outside the standard, alternative evaluation, methods such as the relative importance of the technology in the standard compared to other contributions in the standard, should be considered. Then, determining a FRAND value should take into account the present value added of the patented technology. That value should be irrespective of the market success of the product which is unrelated to the patented technology. FRAND valuation should ensure continued incentives for SEP holders to contribute their best available technology to standards. Finally, to avoid royalty stacking, in defining a FRAND value, an individual SEP cannot be considered in isolation. Parties need to take into account a reasonable aggregate rate for the standard, assessing the overall added value of the technology. Furthermore, the non-discrimination element of FRAND indicates that rightholders cannot discriminate between implementers that are “similarly situated”.  With regard to injunctive relief to enforce SEPs rights, the Commission specifies, in line with the Huawei/ZTE to which it expressly refers, the need to protect SEP holders against infringers unwilling to conclude a licence on FRAND terms and at the same time, that safeguards are needed against the risk that good-faith technology users threatened with an injunction accept licensing terms that are not FRAND or are unable to market their products (hold-ups). The solution to this conflict is also through a better access for users to determine the relevance of the SEP portfolio and compliance with FRAND. The Commission considers that to evaluate a FRAND offer and make an appropriate counter-offer, clear explanations are necessary on the essentiality for a standard, the allegedly infringing products of the SEP user, the proposed royalty calculation and the non-discrimination element of FRAND.

Often standardization agreements will produce efficiency gains. Evidence must nevertheless be brought showing that the information necessary to apply the standard is effectively available to those wishing to enter the market . Furthermore, restrictions in a standardization agreement making a standard binding and obligatory for the industry are in principle not indispensable .

The Guidelines address the standard terms and conditions of professional groupings or competing undertakings setting out standard terms and conditions of purchase or sale of goods or services between competitors or consumers for substitute products . Standard terms and conditions containing provisions which directly or indirectly influence prices charged to customers are anticompetitive by object . On the other hand, it is highly unlikely that standard terms will lead to a foreclosure effect where the participation of competitors has not been restricted and they are non-binding and accessible to all. There are however two exceptions that merit further analysis: standard terms of sale of consumer goods or services where the standard terms define the scope of the product sold to the customer and where therefore the risk of limiting product choice is more significant and standard terms for online purchases for which the customers cannot make a proper assessment and tend to favor widespread practices and standard terms which then may become a de facto standard . However, making standard terms restrictive can, in certain cases, be indispensable to the achievement of efficiencies. The efficiency gains in this case come from the economic benefits to customers who can more easily compare the conditions offered. The higher the number of competitors on the market, the greater the efficiency gain of facilitating the comparison of conditions offered .

Standardization agreements can cover various issues, such as standardization of different grades or sizes of a particular product or technical specifications in markets where compatibility and interoperability with other products or systems is essential. The terms of access to a particular quality mark or for approval by a regulatory body can also be regarded as a standard. Guidelines on horizontal cooperation agreements, at pt 257.

Guidelines on horizontal cooperation agreements, at pt 261.

On the indispensable character of the restriction, see Guidelines on horizontal cooperation agreements, pts. 479 et seq.

Guidelines on horizontal cooperation agreements, pt. 490.

Guidelines on horizontal cooperation agreements, pt 497.

Guidelines on horizontal cooperation agreements, pt 501 et seq.

Guidelines on horizontal cooperation agreements, pts 506 s.

Guidelines on horizontal cooperation agreements, pt 446. Such is the case for an agreement by which established producers of the product jointly acted to prevent a new technology from obtaining the existing standard: Commission Decision No 1999/60 of 21 October 1998, Pre-Insulated Pipe Cartel, LawLex200400003603JBJ.

Commission Decision No 95/551/EC of 29 November 1995, Stichting Certificatie Kraanverhuurbedrijf and the Federatie van Nederlandse Kraanverhuurbedrijven, LawLex200400002510JBJ; Cases T-213/95 and T-18/96 SCK and FNK v Commission [1997] ECR II-1739, LawLex200400003638JBJ.

Commission Decision No 78/156/EEC of 20 December 1977, Video cassette recorders, LawLex200400002810JBJ.

Guidelines on horizontal cooperation agreements, pts 467 et seq.

Guidelines on horizontal cooperation agreements, pt 451 et seq.

Setting out the EU approach to Standard Essential Patents, COM(2017) 712 final, 29 November 2017.

Case C-170/13 Huawei Technologies Co. Ltd, Judgment of 16 July 2015, LawLex201500000955JBJ.

Guidelines on horizontal cooperation agreements, pt. 308 et seq.

European Competition Law

94. Technical standards agreements/Certification

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94. Technical standards agreements/Certification

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise